Hershey's Provocateur-In-Chief Pushes The Candy Company To $10 Billion

Michele Buck, SVP and Chief Growth Officer of The
Hershey Co., is riding a sugar high. Over the last four years the iconic candy company, known for its Kisses, Reese's and Hershey's chocolate bars, has posted consistent gains in sales and net income. Now she's set the confectioner's sights on an even bigger goal: hitting the $10-billion revenue mark by 2017, a 50% increase over the $6.6 billion in revenues it posted last year.

Can the century-old sweets seller reach its aggressive growth target? Buck is certainly going to try. Her role, she says, is to be the company's chief "provocateur"—pushing the boundaries of what's possible. The growth plan she drafted for CEO John Bilbrey calls for an increased marketing push in North America, embracing in-store impulse purchasing and seasonal buying; international expansion into high-growth markets like China, where Hershey's has had early success selling against the Chinese New Year and the nation's growing wedding industry; and targeting mergers and acquisitions, like its recent $85-million purchase of artisanal chocolate brand Brookside.

I recently caught up with Buck to learn more about Hershey, her vision and what it will take to sell $10 billion Kisses.

Jenna Goudreau: I don't hear the title Chief Growth Officer very often. How did that come about?

MicheleBuck: I joined Hershey in 2005 as Chief Marketing Officer. WhenJ.P. Bilbrey took over as CEO about two years ago, he said we needed to look at our next phase of growth and get to the next level by having a growth officer and having the company driven by a marketplace approach rather than a financial approach to strategy. He said: How are we going to win for the next 20 years looking at the marketplace, the environment and what's going on with the consumer? My first task was to architect the company vision for the next 20 years.

That's a pretty tall order. What was the result?

We want to be at $10 billion in revenue in the next five years, which calls for a very aggressive top-line growth rate. We want to transform the geographic footprint to have 25% of our revenue coming from international, and we want to expand our portfolio, leveraging [mergers and acquisitions] and innovation.

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Why $10 billion?

We wanted an aspirational target that could be a rallying cry to motivate the organization for big growth. It goes to my personal philosophy: Set big goals because then you think differently about how you're going to do it. One of my roles is provocateur--to push the bounds of where we might go.

Did you get push back?

When you start laying out an aggressive vision it takes a little time to bring people along. For example, in our strategic plan, we said China was the priority market. Across different parts of the organization, some were saying: Well, yeah, but we’re not going to invest those heads in China. That's a lot. I don't think we're going to do that. I had to say: No. We're not all on the same page. China is the No. 1 market, which means it will get every dollar it needs to grow as fast as it possibly can and then everybody else will get dollars. All of the sudden it changed.

China seems to be the new, top priority for most consumer goods companies these days. Why are you putting your hopes there?

We're really focused on the markets where the category has yet to unfold—markets with high population and strong GDP growth. We know that confectionary consumption correlates with the move of those consumers into the middle class because they then have the affordability to participate. We put the biggest bet on China because we believe we've got an infrastructure in place there that’s strong. There are a lot of consumers moving into the middle class, and we've proven that our brands can work. Kisses have been a big success there. We're going to continue to expand our other global brands in China and begin to plant the seed in other markets like Southeast Asia, the Middle East and India.

How will a marketplace approach, or putting the consumer at the center of your strategy, help fuel growth?

When I first came to Hershey it was a supply-driven business model, with sales and operations running the show. Frankly, I was a bit surprised. I'd ask: How do we launch new products? [They'd say:] Well we go in this room, the sales and ops guys vote, and something goes out in the marketplace. We made a declaration to become much more consumer-centric and insights-driven.

In every organization, it's easy to look at what we can do, but listening to the consumer and hearing what they want may be harder—because we may have to create something new. But, boy, once we did that it unlocked everything. We were spending less than 2% of net sales on advertising. Now we're up to about 8%. We reinvented our innovation process to create strategic, sustainable innovation. The reality is if the consumer doesn't want it, it's not going to last for long.

Where do your consumer insights come from?

We've built an arsenal of proprietary tools across many different areas. One is around mind modeling—to really understand what our brands mean to consumers. We did a massive piece of research with tens of thousands of people to find out who the key users are and which brands filled which need states. That's how we got to the hand-to-mouth platform—one of our most successful in the marketplace. A lot of our products are wrapped individually. The insight was that some of our consumers would prefer not going through the unwrapping and wanted to reseal the bag. We started with Reese's Minis, then Hershey's Drops and then the Bites products. Two years later it's a broad line, and we're still leveraging it.

What are the biggest challenges facing your growth plan?

We need to build a big infrastructure in a market like China. That keeps us hopping. It's a huge amount of hiring--we're talking about massive increases in people year-on-year to support the growth. To me that's the biggest challenge.

You've been in the consumer goods space for the last 27 years, previously at
Frito-Lay and Kraft. What attracted you to the business?

I like being able to connect with the brands and having the opportunity to touch every piece of the business. I love finding that insight that brings something new to the consumer and unlocks growth.

The numbers of female business leaders are still pretty dismal, yet you've made it to the top. What would you say is the secret to your success?

My approach was always to get the very best experiences and a breadth of experience. My first assignment had a plant reporting to me that was in dire straits and was going to be shut down. I seized the opportunity to focus my time there. Learn in each of your assignments. Learn from each person you work with. You get promoted and advanced by making a difference. If you’re a status quo manager--male or female--it's not going to work. Make the mark.